EXECUTIVE SUMMARY
Key findings of this analysis: Scenarios resulting in the most successful7 decarbonization highlight the importance of a clean fuels approach in reaching carbon neutrality. The three scenarios that performed best against the evaluation criteria express several key distinguishing sources of value and roles of a clean fuels network: Exhibit ES.1: Assessment of scenarios along selected key criteria
Resilient Electrification
High Clean Fuels
High Carbon Sequestration
Full Electrification (No Clean Fuels)
$230B
$215B
$245B
$290B
Reliability and Resiliency
Solution for Hard-To-Abate Sectors
Customer Conversion Challenges
Technical Maturity
Affordability
Minimal challenges and/or highest benefit for California
Significant challenges; potentially not viable for California
The three scenarios featuring a clean fuels network are more affordable, resilient, and carry less technology risk than the “no fuels network” scenario. The presence of a clean fuels network minimizes challenges in and obstacles to California’s energy transition. Based on the analysis herein, a clean fuels network is projected to save California energy customers between $45 billion and $75 billion over the course of the next 30 years in avoided costs that would otherwise be needed without a clean fuels network.8 Clean fuels are an important component of any solution to decarbonize hard-to-electrify parts of the California economy such as industry, heavy-duty transportation, and aviation.9 Benefits include the relative ease of storing energy-dense molecules compared to electric battery storage based on current technology projections, and the specific end-use requirements such as highgrade heat in industry that is challenging to achieve without fuels. 7“Successful” is defined as meeting balanced goals of affordability, resiliency, minimizing customer conversion challenges, ability to solve for hard-to-abate sectors, and technical maturity. 8This corresponds to the difference in net present value (NPV) of costs between the No Fuels Network scenario and the other more plausible scenarios over the 2020-2050 period. This study estimates California’s economy-wide cost to produce, deliver, and consume energy from 2020-2050. Costs vary depending on the demand side inputs and supply side assumptions and constraints applied to each scenario. Additional details can be found in the Appendix. 9Rocky Mountain Institute, “Hydrogen’s Decarbonization Impact for Industry: Near-term challenges and long-term potential,” January 2020, available at: https://rmi.org/wp-content/uploads/2020/01/hydrogen_insight_brief.pdf; US Department of Energy, Office of Energy Efficiency and Renewable Energy, “Sustainable Aviation Fuel: Review of Technical Pathways,” September 2020, available at: https://www.energy.gov/sites/prod/files/2020/09/f78/beto-sust-aviation-fuel-sep-2020.pdf; Ogden, Joan M, “Prospects for Hydrogen in the Future Energy System,” University of California, Davis, Institute of Transportation Studies, Research Report UCD-ITS-RR-18-07, March 2018, available at: https://escholarship.org/uc/item/52s28641.
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